When it comes to your home, it’s not just a place to rest your head. It’s also an investment. If you are thinking about renovating your home, you should know that there are some projects that return a higher yield when it’s time to sell. Wondering which home improvement project to tackle first to get the most bang for your buck? In this article we are going to talk about the best renovations you can make in your home to get the highest return on your investment.
Remodeling Magazine (http://www.remodeling.hw.net/) just released their latest findings on costs of remodeling and the average return you can expect to see on your investment. Based on findings of Return on Investments (ROI) in the Mountain area, Action Team Realty created the graphic below to illustrate the best investment projects and just how much of a return you can expect to see. Keep in mind that these are averages, and not guarantees. You may see a lower, or a significantly higher return, depending on how smart you are with your remodeling choices.
Other renovation projects that made the list included:
• Basement Remodels at a 70% ROI
• Wood Deck Addition at 69.4% ROI
• Family Room Addition at 69% ROI
• Vinyl Siding Replacement at 67.9% ROI
• Roof Replacement at 66.9% ROI
• Fiberglass Entry Door Replacement at 66% ROI
• Master Suite Addition at 64.9% ROI
• Major Kitchen Remodel (Over $40K) at 64.6% ROI
• Bathroom Remodel at 60.9% ROI
• Composite Deck Addition at 58.9% ROI
• Bathroom Addition at 51.2% ROI
It’s important to note that while the above statistics are valuable, it’s also noteworthy to consider what a potential home buyer will be looking for. Maintenance, for example. While granite countertops are a great selling feature, if your home has a leaky roof and a broken furnace the pretty countertop suddenly seems less important. Buyers know that if there are obvious maintenance issues, chances are there are more problems with the home that can’t be seen during a showing. Besides scaring away buyers, some maintenance issues if left unrepaired can cause some major damage to your home. A leaky basement can lead to mold problems, foundation issues, and more down the road. So, it’s important to prioritize your project, and get those maintenance issues out of the way first.
If you look at the list above, you may have noticed something in common with the top renovations. Five of the seven top items are things that a buyer can see from the curb. If a potential buyer drives by your house and is not impressed, chances are they won’t ever walk inside. It’s something to keep in mind when deciding how to prioritize your remodeling dollars.
Another thing to think about before tackling a renovation is the style of home you live in. For example, if you live in a Victorian style home you should do a little research into renovations that complement the Victorian style. Home buyers who seek out certain design features in a home are sometimes disappointed to see that the claw-foot tub and crown molding are absent, and opt for a home that has those charming features common in that house style. Invest well, and make sure your new renovations don’t suck the charm out of your house.
Other things to consider when thinking about the return on your investment is the average cost of homes in the neighborhood, the current value of your house, housing trends in the market you live in, and how soon you plan to sell after completing the remodel. If the most expensive home on the block is going for $150,000 it doesn’t make much sense to invest in a high-end gourmet kitchen or a $20,000 home theater. The return just isn’t there. On the other hand, if you intend on living in your home for many years to come, you may want to put in the heated flooring and floor-to-ceiling tile on your bathroom remodel because it appeals to you personally. If you plan to stick around, invest your money where you will enjoy it. If not, try to think about what a buyer would be looking for, and how much you can actually get back from the investment.
Hopefully after reading this article you are feeling a little more educated about where you’d like to invest your renovation dollars. If you are still unsure, and would like a professional opinion on where you should invest in your home, our REALTORS® are happy to come out to your home and lend a professional opinion free of charge!